IDEAS home Printed from https://ideas.repec.org/a/gam/jecomi/v9y2021i3p120-d620797.html
   My bibliography  Save this article

Inward Foreign Direct Investment and Trade Openness in Vietnam: A Nonlinear Autoregressive Distributed Lag Approach

Author

Listed:
  • Jen-Yao Lee

    (Department of International Business, National Kaohsiung University of Science and Technology, Kaohsiung 82445, Taiwan)

  • Ya-Chuan Hsiao

    (Department of International Business, National Kaohsiung University of Science and Technology, Kaohsiung 82445, Taiwan)

  • Ngochien Bui

    (Department of International Business, National Kaohsiung University of Science and Technology, Kaohsiung 82445, Taiwan)

  • Tien-Thinh Nguyen

    (Department of International Business, National Kaohsiung University of Science and Technology, Kaohsiung 82445, Taiwan)

Abstract

This study aims to examine the asymmetric relationship between trade openness and FDI (foreign direct investment) inflows to Vietnam by using NARDL (nonlinear autoregressive distributed lag) during the period from 1997 to 2019. Our findings show that the influence of FDI on trade openness is asymmetric in the short-run and long-run. But the influence of trade openness on FDI is symmetric in the short-run and asymmetric in the long run.

Suggested Citation

  • Jen-Yao Lee & Ya-Chuan Hsiao & Ngochien Bui & Tien-Thinh Nguyen, 2021. "Inward Foreign Direct Investment and Trade Openness in Vietnam: A Nonlinear Autoregressive Distributed Lag Approach," Economies, MDPI, vol. 9(3), pages 1-18, August.
  • Handle: RePEc:gam:jecomi:v:9:y:2021:i:3:p:120-:d:620797
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7099/9/3/120/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2227-7099/9/3/120/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 15(1), pages 222-279, April.
    2. Nikolina Kosteletou & Panagiotis Liargovas, 2000. "Foreign Direct Investment and Real Exchange Rate Interlinkages," Open Economies Review, Springer, vol. 11(2), pages 135-148, April.
    3. Minchung Hsu & Junsang Lee & Roberto Leon-Gonzalez & and Yanqing Zhao, 2019. "Tax incentives and foreign direct investment in China," Applied Economics Letters, Taylor & Francis Journals, vol. 26(9), pages 777-780, May.
    4. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    5. Anwar, Sajid & Nguyen, Lan Phi, 2011. "Foreign direct investment and trade: The case of Vietnam," Research in International Business and Finance, Elsevier, vol. 25(1), pages 39-52, January.
    6. Raphael S. Etim & Mfon S. Jeremiah & Ofonime O. Jeremiah, 2019. "Attracting Foreign Direct Investment (FDI) In Nigeria through Effective Tax Policy Incentives," International Journal of Applied Economics, Finance and Accounting, Online Academic Press, vol. 4(2), pages 36-44.
    7. Glick,Reuven (ed.), 1998. "Managing Capital Flows and Exchange Rates," Cambridge Books, Cambridge University Press, number 9780521623230.
    8. Petar Kurecic & Filip Kokotovic, 2017. "The Relevance of Political Stability on FDI: A VAR Analysis and ARDL Models for Selected Small, Developed, and Instability Threatened Economies," Economies, MDPI, vol. 5(3), pages 1-21, June.
    9. Nunnenkamp, Peter, 2002. "Determinants of FDI in developing countries: has globalization changed the rules of the game?," Kiel Working Papers 1122, Kiel Institute for the World Economy (IfW Kiel).
    10. Raphael S. Etim & Mfon S. Jeremiah & Ofonime O. Jeremiah, 2019. "Attracting Foreign Direct Investment (FDI) In Nigeria through Effective Tax Policy Incentives," International Journal of Applied Economics, Finance and Accounting, Online Academic Press, vol. 4(2), pages 36-44.
    11. Lee, Jong-Wha, 1995. "Capital goods imports and long-run growth," Journal of Development Economics, Elsevier, vol. 48(1), pages 91-110, October.
    12. McLaren, John & Yoo, Myunghwan, 2017. "FDI and inequality in Vietnam: An approach with census data," Journal of Asian Economics, Elsevier, vol. 48(C), pages 134-147.
    13. Rana Ejaz Ali Khan & Qazi Muhammad Adnan Hye, 2014. "Foreign direct investment and liberalization policies in Pakistan: An empirical analysis," Cogent Economics & Finance, Taylor & Francis Journals, vol. 2(1), pages 1-12, December.
    14. Panagiotis Liargovas & Konstantinos Skandalis, 2012. "Foreign Direct Investment and Trade Openness: The Case of Developing Economies," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 106(2), pages 323-331, April.
    15. James R. Markusen & Keith E. Maskus, 2002. "A Unified Approach to Intra-Industry Trade and Foreign Direct Investment," Palgrave Macmillan Books, in: P. J. Lloyd & Hyun-Hoon Lee (ed.), Frontiers of Research in Intra-Industry Trade, chapter 11, pages 199-219, Palgrave Macmillan.
    16. Rizgar Abdlkarim Abdlaziz & Khalid Abdul Rahim & Peter Adamu, 2016. "Oil and Food Prices Co-integration Nexus for Indonesia: A Non-linear Autoregressive Distributed Lag Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 6(1), pages 82-87.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Prof. Hyacinth Ichoku & Dr. Ihuoma Anthony & Dr. Tosin Olushola & Apinran Martins, 2023. "Analyzing the Evolving Relationships among Climate Change, Insecurity, and Food Price Inflation in Nigeria: NARDL Approach," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(11), pages 100-124, November.
    2. Muhammed Sehid Gorus & Veli Yilanci & Maxwell Kongkuah, 2023. "FDI Inflows-Economic Globalization Nexus in ASEAN Countries: The Panel Bootstrap Causality Test Based on Wavelet Decomposition," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 30(2), pages 339-362, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Malsha Mayoshi Rathnayaka Mudiyanselage & Gheorghe Epuran & Bianca Tescașiu, 2021. "Causal Links between Trade Openness and Foreign Direct Investment in Romania," JRFM, MDPI, vol. 14(3), pages 1-18, February.
    2. Eric Amankwaah & Nicholas Mensah & Nana Okyir Baidoo, 2022. "The impact of location tax incentives on the growth of rural economy: evidence from Ghana," Future Business Journal, Springer, vol. 8(1), pages 1-19, December.
    3. Chama Chipeta, 2022. "Analysing The Employment Effects Of The Exchange Rate, Foreign Direct Investment And Trade Openness On South Africa’S Non-Tradable Sectors," JOURNAL STUDIA UNIVERSITATIS BABES-BOLYAI NEGOTIA, Babes-Bolyai University, Faculty of Business.
    4. Sakli Hniya & Ahlem Boubker & Fatma Mrad & Sawssen Nafti, 2021. "The Impact of Real Exchange Rate Volatility on Foreign Direct Investment Inflows in Tunisia," International Journal of Economics and Financial Issues, Econjournals, vol. 11(5), pages 52-67.
    5. Panagiotis Liargovas & Konstantinos Skandalis, 2012. "Foreign Direct Investment and Trade Openness: The Case of Developing Economies," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 106(2), pages 323-331, April.
    6. Konara, Palitha & Wei, Yingqi, 2019. "The complementarity of human capital and language capital in foreign direct investment," International Business Review, Elsevier, vol. 28(2), pages 391-404.
    7. Saidu D. Muhammad & Nnanna P. Azu & Ngozi F. Oko, 2018. "Influence of Real Exchange Rate and Volatility on FDI Inflow in Nigeria," International Business Research, Canadian Center of Science and Education, vol. 11(6), pages 73-82, June.
    8. Jakub Odehnal & Jiří Neubauer & Aleš Olejníček & Jana Boulaouad & Lenka Brizgalová, 2021. "Empirical Analysis of Military Expenditures in NATO Nations," Economies, MDPI, vol. 9(3), pages 1-15, July.
    9. Victalice Ngimanang Achamoh & Francis Menjo Baye, 2016. "Implications Of Foreign Direct Investment, Financial Development And Real Exchange Rate For Economic Growth In Cameroon," EuroEconomica, Danubius University of Galati, issue 1(35), pages 149-163, may.
    10. Cong Minh Huynh & Vu Hong Thai Nguyen & Hoang Bao Nguyen & Phuc Canh Nguyen, 2020. "One-way effect or multiple-way causality: foreign direct investment, institutional quality and shadow economy?," International Economics and Economic Policy, Springer, vol. 17(1), pages 219-239, February.
    11. Jiranyakul, Komain, 2011. "Are Thai Manufacturing Exports and Imports of Capital Goods Related?," MPRA Paper 45654, University Library of Munich, Germany.
    12. Rehman, Faheem Ur & Khan, Muhammad Asif & Khan, Muhammad Atif & Pervaiz, Khansa & Liaqat, Idrees, 2020. "The causal, linear and nonlinear nexus between sectoral FDI and infrastructure in Pakistan: Using a new global infrastructure index," Research in International Business and Finance, Elsevier, vol. 52(C).
    13. Dandume, Muhammad Yusuf, 2013. "Institution and Economic Growth performance in Nigeria," MPRA Paper 52356, University Library of Munich, Germany, revised 2013.
    14. Radovan Kastratović, 2020. "The impact of foreign direct investment on host country exports: A meta‐analysis," The World Economy, Wiley Blackwell, vol. 43(12), pages 3142-3183, December.
    15. Sarker, Bibhuti & Serieux, John, 2023. "Multilevel determinants of FDI: A regional comparative analysis," Economic Systems, Elsevier, vol. 47(3).
    16. Ding Chen & Umar Muhammad Gummi & Junping Wang, 2024. "Does Renminbi internationalization matter for petroleum security in China? Evidence from a disaggregate analysis," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(1), pages 961-974, January.
    17. Polyxeni, Kechagia & Theodore, Metaxas, 2019. "An empirical investigation of FDI inflows in developing economies: Terrorism as a determinant factor," The Journal of Economic Asymmetries, Elsevier, vol. 20(C).
    18. Wakimin, Nur Fadzlunnisaa & Azlina, A.A. & Samsudin, Hazman & Kamaludin, Mahirah, 2019. "The Impact of Tourism Demand, Government Expenditure on Education and Income on the Environment in ASEAN-5 Countries," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 53(3), pages 75-90.
    19. Johannes Fedderke & John Luiz & Raphael Kadt, 2008. "Using fractionalization indexes: deriving methodological principles for growth studies from time series evidence," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 85(2), pages 257-278, January.
    20. Seth Nana Kwame Appiah-Kubi & Karel Malec & Joseph Phiri & Mansoor Maitah & Zdeňka Gebeltová & Luboš Smutka & Vojtech Blazek & Kamil Maitah & Jitka Sirohi, 2021. "Impact of Tax Incentives on Foreign Direct Investment: Evidence from Africa," Sustainability, MDPI, vol. 13(15), pages 1-12, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jecomi:v:9:y:2021:i:3:p:120-:d:620797. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.